Selling of the US currency by exporters and banks and broad dollar weakness is boosting the rupee, say traders.

The Indian rupee rose for the fourth day today to hit 63.81 at day's high against the US dollar - its fourth day of gains against the greenback. This is the highest value of the rupee in about two weeks. Yesterday, the rupee ended higher by 18 paise against the dollar to close at 63.91. The US dollar continued its descent today, hitting a three-year low against a basket of major currencies. The rupee traded in a narrow range of 63.87 to 63.81 against the US dollar today. A higher domestic equity markets also boosted the rupee.

Five Things To About Rupee's Rise Today

Sustained selling of the US currency by exporters and banks amid a higher opening in the domestic equity market, said traders.

The dollar index fell to as low as 88.37, and was on course to lose over 2 per cent for the week, its biggest such loss in two years. The dollar Index is a measure of the value of the US dollar relative to a basket of foreign currencies.

There is no strong consensus yet on what is driving the dollar's persistent weakness, especially in light of rising yields in the US. The dollar's fall came even as U.S. bond yields remained near a multi-year high.

Some analysts say that the recovery in broader risk sentiment after the recent global selloff in equities was seen weighing on the dollar. The US dollar had gained after during the market turmoil earlier in the month, say analysts. Worries about the growing US fiscal deficit, concerns that US might pursue a weak dollar strategy and other countries start to scale back their easier monetary policy are also weighing on the dollar, say some analysts.

The US dollar-rupee pair has Immediate support can be seen near 63.80 levels and further at daily trendline of 63.70 levels, says forex advisory firm IFA Global. Data released yesterday showed trade gap increasing to $16.3 billion in January on account of a 26.1 per cent increase in imports to $40.68 billion due to increased inbound shipments of crude oil. (With Agency Inputs)